Corbett v Bond Pearce
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CHADWICK |
| Judgment Date | 04 August 2006 |
| Neutral Citation | [2006] EWCA Civ 1315 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 August 2006 |
| Docket Number | B6/2006/1170 |
[2006] EWCA Civ 1315
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE RIMER)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Chadwick
B6/2006/1170
MR W FENLEY (instructed by Russell Jones and Walker, LONDON WC1X 8DH) appeared on behalf of the Appellant.
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED.
Judgement
This is an application for permission to appeal from an order made on 28 April 2006 by Rimer J in proceedings brought by the applicant, Mr William Corbett suing as administrator of Miss Nancy Tresawna, against Bond Pearce, a firm of solicitors. The background to the litigation is set out in the judgment of Sir Christopher Slade delivered on an earlier appeal [2001] EWCA Civ 531, [2001] 3 All ER 769.
It is unnecessary to rehearse that background at length. But, in order that this judgment may be understood, I must set out a summary of the facts. Miss Tresawna died on 6 February 1991. Some two years earlier on 3 February 1989 she had made a will, which is conveniently described as "the February will". By that will she devised her property Lamellyn Farm, Probus, to her niece, Mrs Arthur, and another property, Tolcarne Merrock Farm, to her nephew, Mr Corbett. She made a number of small specific gifts of chattels and gave some modest pecuniary legacies. She devised the property in which she lived, Myrtle Cottage, Grampound, and her seven-eighths share in two other properties, known as the Probus trust properties, to Mrs Arthur and Mr Corbett in equal shares. Subject to those specific devises and bequests, she gave her residuary estate to Mrs Arthur and Mr Corbett in equal shares.
Later that year, on about 29 September 1989, Miss Tresawna executed another document in the form of a will. It is convenient to refer to that document as "the September will". The September will contained no specific disposition of the farms known as Lamellyn and Tolcarne Merrock and it was not dated. The reason for that was that Miss Tresawna had decided to give those two properties to Mrs Arthur and Mr Corbett during her lifetime. But she had not done so in September 1989. The intra vires gifts of the two properties were not made and effected until 25 December 1989. Immediately thereafter, on 26 December 1989, the solicitor who had acted for her in connection with the September will, Mr Nicholson of Bond Pearce, completed that document by inserting the date 26 December 1989.
The September will gave specific and pecuniary legacies which were similar to, but not in all respects the same as, the specific and pecuniary legacies given by the February will. It gave Mrs Arthur Miss Tresawna's seven-eighths share in one of the Probus trust properties. Miss Tresawna's share in the other of the two Probus trust properties was given to Mr Corbett. Miss Tresawna gave her residue, which included the house in which she lived, Myrtle Cottage, Grampound to James and Jonathan Arthur, the sons of Mrs Arthur.
Mr Corbett challenged the September will on the basis that Miss Tresawna had no immediate testamentary intention at the time when she executed that document in September 1989. Her intention was that that document should not take effect as a will until the lifetime gifts of the two farms had been completed and the will had been dated; but the will was not expressed to be conditional on those events. The challenge failed before Mr Eben Hamilton QC sitting as a deputy judge of the High Court in the Chancery Division. His judgment is reported as Corbett v Newey and Others [1994] Ch 388. But the challenge succeeded on appeal before this court on 15 February 1996 — reported as Corbett v Newey and Others [1998] Ch 57. This court pronounced in favour of the February will. It ordered that the costs of all parties to those probate proceedings be paid out of the estate. Those costs included the costs of Mr Newey, who was defendant to the proceedings as an executor named in the September will.
The effect of that order, of course, was that the expectations of those entitled to residue under the September will — James and Jonathan Arthur — were wholly disappointed. The expectations of those entitled to the specific legacies under the September will were disappointed in principle; but in some measure they were compensated for that disappointment by the legacies which they were to receive under the February will. The expectations of Mrs Arthur and Mr Corbett, as specific devisees of the two Probus trust properties, were altered. In particular those properties had been left to bear their own inheritance tax under the February will. The estate was depleted by the burden of costs payable to all parties to the probate action. That gave rise to the important question whether there was sufficient residue to pay those costs. To the extent that the residue was not sufficient to pay probate costs, the balance would have to be met out of the properties specifically devised and bequeathed by the February will; that is to say, substantially out of the two Probus properties.
On 21 September 1995 Mr Corbett commenced the present proceedings against Bond Pearce, claiming loss and damage arising out of their negligence as solicitors for Miss Tresawna in connection with the September will. At that time he was not a personal representative of the deceased; but, on 28 October 1996, he obtained letters of administration, with the February will annexed to Miss Tresawna's estate. He amended those proceedings to claim, in his representative capacity, for the benefit of the estate. Thereafter, at least, those proceedings continued on the basis that they were proceedings for the benefit of the estate and were not proceedings brought by Mr Corbett as a disappointed beneficiary under the September will.
Bond Pearce admitted negligence in those proceedings on 12 November 1998. The parties agreed preliminary issues and a statement of facts on which those preliminary issues should be tried. I should read the terms of those preliminary issues:
"1. In the above circumstances [that is in the circumstances set out in the agreed statement of facts], is the Claimant, as personal representative of the Testatrix, able to recover damages for breach of contract or for negligence against the Defendant by reference to the loss suffered by the Estate by reason of either or both of the following:
(a) the diminution of the value of the Estate attributable to the costs payable in the Will Action; or
(b) any other loss or liability incurred by the Estate as a result of the Will Action, the costs order made in the Will Action, and the delay in the administration of the Estate caused by the Defendants' breach of contract and negligence."
Does the answer to the question posed in paragraph 1 above or any part of it depend upon whether the estate after payment of the liabilities referred to in paragraphs (a) and (b) contains sufficient assets to discharge all the creditors of the estate, distribute specific legacies, and still leave a balance to form a residue for distribution in accordance with the terms of the February Will? The reference there to "specific legacies" seems to have been treated throughout as being including specific devises and pecuniary legacies, as well as specific legacies of chattels.
Those issues came before Eady J for trial in May 2000. In the meantime Mr Corbett had issued a summons in the Court of Appeal seeking to reopen the question whether or not Mr Newey's costs of the probate action should be paid out of the estate. His point, essentially, was that there had been no-one, as party to that action, to represent the estate in order – made in February 1996 — to oppose the order that Mr Newey's costs be paid out of it; and that Mr Newey should not be given his costs in the unusual circumstances that he had been funded to defend the probate action by the solicitors' indemnity fund, standing behind Bond Pearce. Me Newey's participation had been on the basis, as Mr Corbett alleged, that the fund had taken the view that it was in their interests to resist the probate action so that the September will would be admitted to probate: thereby either eliminating, or at least reducing, the costs that would flow from the potential negligence claim against their insured, Bond Pearce. Mr Corbett took the view — understandably perhaps – that, if Mr Newey had taken part in the probate action on that basis, in circumstances where the September will was being propounded by the beneficiaries entitled to residue under that will and Mrs Arthur, there was good reason why the estate should have to bear only one set of costs and those should not be Mr Newey's costs. That application failed in this court. Mr Corbett was left to bear the costs of that application as administrator of the estate.
The preliminary issues, as I say, came to trial before Eady J. By an order which he made on 25 May 2000, he answered the first of the preliminary issues in the affirmative and the second in the negative. The effect of the answer to the second of the issues was that the potential liability of Bond Pearce was not capped by an amount equal to the amount needed to put the estate into the position in which, after discharging costs and other liabilities, it could pay creditors and specific legacies given by the February will. So it was possible, under that order, that the residuary beneficiaries under the February will might benefit from the recovery of damages from Bond Pearce; notwithstanding that, if Bond Pearce had not been negligent,...
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